WINTER IS COMING…
The Weather Channel has released its Winter Outlook and the stars have aligned for Alpha Seven Energy and our partners.
This year is going to be a La Niña year, which means a colder than average and wet season for the northern states and warmer than average and dry conditions in the southern states. Anyone who works or invests in oil and gas knows that the weather plays a huge role. Let’s look at some of the pros and cons of knowing how the winter will play out:
- Oil and gas companies and utilities can better prepare for seasonal demand requirements, fuel storage needs, supply and logistics planning, etc.
- Northern states will be impacted by weather, so new drilling will be challenging because of snow and rainfall, frozen ground, inclement working conditions, etc.
- Southern states will continue to drill new projects, uninhibited by the weather.
- Northern states will be facing colder temperatures than they have in the past two years, meaning they will utilize more oil and gas to stay warm and southern states will fill that need.
- Rapid cold fronts are expected to impact the northern states, creating periods of extremely high demand for oil and gas.
With all of Alpha Seven Energy’s current plays being in the southern states, this bodes well for us. All our projects should continue to run on schedule, not impacted by weather for any extended period. As demand rises across the northern United States, the price per barrel will likely increase, meaning potentially higher returns for Alpha Seven Energy and our investors.
At Alpha Seven Energy, we are fond of saying that there will never be a better time to invest in oil and gas, and we wholeheartedly believe that to be true all year long. However, this Winter Outlook points to now being the best time all year to invest in oil and gas. Whether you live up north and are unpacking your coats and snow blowers, or you live down south and are keeping your pool uncovered, it’s time to reap the benefits of a La Niña winter.